Momentum Builds for Halting ECB Rate Cuts
Consumer prices in the Eurozone (the 20 countries using the euro) rose by 2.0% year-on-year in June, according to preliminary estimates.
On July 1 (local time), Eurostat, the statistical office of the EU, reported that the inflation rate reached 2.0%, which is the European Central Bank (ECB)'s medium-term inflation target. This figure is slightly higher than the previous month's 1.9% and matches market expectations.
The core inflation rate remained unchanged from May at 2.3%. By category, prices for energy (-2.7%) and industrial goods (0.5%) have shown a stable trend for several months, while price increases in services (3.3%) and food, alcohol, and tobacco (3.1%) offset this stability.
Bloomberg News commented that arguments for a temporary pause in the ECB's interest rate cuts, which have continued for nearly a year, are gaining traction.
Analysts say that the strength of the euro, falling energy prices, and sluggish economic growth in the 20 Eurozone countries are all helping to suppress inflationary pressures.
Uncertainty persists over trade disputes between the European Union (EU) and the administration of Donald Trump in the United States. Experts pointed out that if U.S. trade barriers remain in place and the EU retaliates, production costs for companies could rise, potentially fueling inflation again.
Christine Lagarde, President of the ECB, said in a speech at the 'European Central Bank (ECB) Central Banking Forum' the previous day, "It will take time to gather enough data to be confident that the risk of inflation exceeding the target has disappeared."
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